Thrissur: In July 2023, the Directorate of Enforcement (ED) approached Sailakshmi G to register her statement in the Rs 343-crore loan fraud perpetrated at the CPM-controlled Karuvannur Service Cooperative Bank in Thrissur. The call was four-and-a-half years late, she said. "Had ED responded when I first went to it in 2019, it could have saved at least five lives," she said.
On May 6, 2016, she applied for a loan of Rs 10 lakh with Karuvannur bank to start an offset printing press for her husband Hariharan G. The Karunvanur bank asked for the original title deed of her 13-cent plot adjacent to Irinjalakuda bus stand for legal scrutiny. She never got the loan. But the bank employees led by the then secretary Sunil Kumar T R and the then manager Biju M Kareem allegedly mortgaged her title deed to sanction six loans worth Rs 3 crore to unknown persons on June 2, 2016, that is, 27 days after the bank got her loan application.
Sailakshmi came to know of the fraud in January 2019, when she got a revenue recovery notice from the bank for a loan taken by an unidentified person named Rajan. In 2019, the ED -- the central agency that investigates money laundering cases -- was reportedly not ready to register Sailakshmi's complaint. "The ma'am there... I still remember her name, Preethi. She told me they cannot take up my case without an FIR," Sailakshmi said. If Irinjalakuda police had registered her complaint, she would not have gone to the Directorate of Enforcement in the first place, said BJP leader M V Suresh, who accompanied her to the ED's office in Kochi in February 2019.
ED always held the position that a first information report (FIR) registered by police or any other investigating agencies was essential for it to record an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA). The central agency changed its stance only in September 2021 when it recorded an ECIR without an FIR in the National Herald case in which Sonia Gandhi and Rahul Gandhi were accused. "If they made some amendment to the rules and taken up my case, five lives could have been saved," she said, referring to former panchayat member T M Mukundan and Jose Alappadan, who ended their lives because of the scam; and depositors Philomena Devassy, Roy, and Raman Edachali, who lost their lives after the bank denied them money for better treatment.
How Sailakshmi was duped
Sailakshmi, a single child, was raised by her mother who worked in farmland owned by her extended family. Sailakshmi inherited a 13-cent plot with a house near Irinjalakuda from her mother. "My mother worked hard and gave me the house without any debt," said Sailakshmi, who works in the accounts department of an electrical and plumbing company in Irinjalakuda.
In 2004, a boy was born to Sailakshmi and Hariharan, who worked in a printing press in Dubai and became parents. In 2006, Hariharan returned home because Sailakshmi was finding it difficult to take care of the toddler and her ailing mother on her own. Her mother died the same year. Ten years later, she wanted to help her husband own a printing press and applied for a loan with Karuvannur bank. Since then, her life has become a struggle against a system.
The bank did not sanction a loan to Sailakshmi but did not return the title deed either. Initially, the bank manager Biju Kareem reportedly told her that the delay was because the plot was outside the bank's jurisdiction. Then he said he was getting the bank president K K Divakaran to release the loan. "My husband pleaded with Biju to return the title deed and that we did not want a loan from the bank. But he always had excuses such as the locker in-charge is absent or secretary is on leave or the loan is still being processed to deny us the title deed," she said.
Yet, Sailakshmi was reassured by her relatives. Her late eldest maternal uncle was a joint manager with the Reserve Bank of India (RBI). Another uncle and aunt were employees of a nationalised bank. "I have bankers in my family. They told me a bank would not withhold title deeds needlessly and would return the documents if it could not sanction loans," she said.
Her hopes were shattered in January 2019 when she received a recovery notice from the bank. The notice said a loan of Rs 50 lakh was sanctioned to Rajan by mortgaging Sailakshmi's property in 2016 itself and the loan was not repaid. It also said the attachment process started in 2017 and summons were sent to another address in December 2018.
Sailakshmi and Hariharan rushed to the bank with the notice. But Biju Kareem told them it was a "clerical mistake" on the part of a new employee at the office in Mapranam and asked them to return the notice to him. "My husband got furious for he was treating us like fools. He said he would break Biju's laptop," he said.
The couple returned home with the notice in hand. "This is the first time we got evidence that something wrong was happening in the cooperative bank," said Sailakshmi, who has a BCom (Cooperation) degree. She then applied for an encumbrance certificate to check for the financial claims on her property. The certificate shocked her. Karuvannur bank sanctioned six loans worth Rs 3 crore to six different persons (Rs 50 lakh each) on her property. Two of the names were of Sailakshmi and Hariharan.
Armed with her passbook and PAN, the couple went to Irinjalakuda police station to file a cheating case against the bank. "The police told us that they would not register a case against Karuvannur bank and not to defame such a good bank. They had said the same before when I approached them in 2017 and 2018," said Sailakshmi. But in January 2019, the police were hostile. "The moment I mentioned Karuvannur bank, the officers became aggressive. I felt lucky they did not assault me," she said. Famous Varghese was the Irinjalakuda DySP then.
Then she and her lawyer went to the office of Assistant Registrar for cooperative societies in Mukundapuram taluk. "Assistant Registrar Ajith M C said he cannot accept the complaint and threw the file at my lawyer's face," alleged Sailakshmi. She wanted the official to revoke the recovery procedure initiated against her. He refused. "I asked him why the recovery notice was issued only for a Rs 50 lakh loan and not on the other five loans, he casually said the others might be repaying the loans," she said.
Two of the others are Sailakshmi and her husband Hariharan. The official had no interest in finding out the real borrowers. "My lawyer, who is no more, told him that he would be suspended from service if the outside world came to know of what is happening at Karuvannur," she said.
Sure enough, joint registrar (audit) Mohanmon P Joseph of Thrissur district and Ajith M C were among the 16 officials of the Department of Cooperation who were suspended from service in August 2021 for not acting on a 2019 official report exposing the loan frauds in Karuvannur bank. "Those officials are not back in service," said Sailakshmi.
After being rebuffed by the Department of Cooperation and Kerala Police, she wrote to the RBI, the banking regulator. RBI wrote back to her saying it has no authority over cooperative societies. She then telephoned the district official of Nabard, which provides loans to cooperative societies. "The official was on leave so I called her personal number. Her little daughter was in her arms, crying. When I mentioned Karuvannur, I sensed she placed the baby on the floor and told me if it is about Karuvannur bank, don't contact her again," Sailakshmi said. "The official asked me not to even mail the complaint because she cannot accept it for it will affect her job. There was a sense of fear in her voice." That's when she took the help of BJP leader Suresh M V and approached ED.
Filed three cases in three courts
After getting no justice from the Karuvannur bank, police, the Department of Cooperation, and ED, she decided to move the courts. First thing, she wanted to secure the title deed of her property.
In January 2019, she filed a petition in the Civil Court of Irinjalakuda seeking its intervention to retrieve her title deed. The bank appointed a commissioner to look into the matter. The commissioner sought from the bank its denomination register and Sailakshmi's lawyer sought the day book from the bank. The day book should have the loans disbursed in a day, and the denomination book should have the denominations of the cash disbursed in a day.
"The Encumbrance Certificate said the six loans worth Rs 3 crore were disbursed on June 2, 2016. But that was not reflected in the day book on the corresponding date," said Sailakshmi. The denomination book also did not have any entry. "The bank told the court that the loan was disbursed in cash to the borrowers outside the bank," she said. The Irinjalakuda Civil Court then directed the bank to bring the title deed and keep it in the court's safe locker. Nearly five years on, the case is still on.
Soon after filing the civil case, Sailakshmi filed a criminal case in the Irinjalakuda magistrate court on February 15, 2019, because the police were not registering her complaint. She named bank member Kiran P P, the then secretary Sunil Kumar T R, the Karuvannur Service Cooperative Bank, and the then manager Biju Kareem as the four accused. She named Kiran as the first accused because the six loans were disbursed in his 'care of'.
In the case registered by the Directorate of Enforcement, Kiran is the second accused and is charged with taking Rs 25 crore of illegal loans from the bank. But the criminal case is going nowhere because the accused said they had not received any notice from the court, she said.
On October 6, when Onmanorama first contacted her, she was at the court. The case was adjourned to October 20. On October 20, it was adjourned to October 31. In her third legal case, she moved the High Court of Kerala seeking its intervention to quash the recovery procedure against her initiated by the Assistant Registrar of Mukundapuram Ajith M C.
The court directed the official to reexamine her case. Assistant Registrar Ajith concluded that she was issued a summons after the date of hearing for revenue recovery and quashed the order. "But there will be five more cases and all six loans are against my property. So it is not the end of the battle for me," she said.
Illegal loans reached first accused Satheesh Kumar
The Directorate of Enforcement recorded a case in the Karuvannur bank scam on August 2, 2021, 19 days after the Crime Branch registered 16 FIRs. Almost a year later, the ED conducted searches at the bank on August 22 and 23, 2022.
In September this year, it made four arrests in the case -- private financier Satheesh Kumar P (56), estate player and society member Kiran P P (33); Wadakkanchery municipal councillor and CPM leader Aravindakshan P R (56), and the bank's senior accountant Jilse C K (45). In its remand report submitted to the Special PMLA Court, ED Deputy Director Prashanth Kumar said the bank had sanctioned illegal and unsecured loans worth Rs 24.56 crore to Kiran over the years by mortgaging properties of unsuspecting loan applicants.
Of the 24.56 crore, ED said Kiran gave Rs 14 crore to Satheesh Kumar P, the first accused. After questioning Satheesh Kumar's staff member Jijor, ED also concluded that the Rs 3 crore loan sanctioned by mortgaging Sailakshmi's 13 cents was received by Satheesh Kumar.
'Real estate players behind the scam'
Sailakshmi said land sharks were behind the loan scam at Karuvannur Service Cooperative Bank. "From 2003, the real estate mafia was behind my property but they could not lay a hand on it because it was never mortgaged," she said.
She said land sharks put a price and owners had to agree to it. If the owners resisted, the mafia would trap them, she said. "But I cannot sell the plot my mother gave me and I will not die till I free my plot from their clutches," she said.
